Wednesday, September 28, 2011

As a personal rule of thumb and as an Allen Tate company policy we ALWAYS recommend a property survey when purchasing a home or vacant land. I say that up front because so many buyers choose not to have a survey performed when buying. We see the choice made, not to have a full survey frequently in platted subdivisions or existing homes where sellers sometimes provide the new buyer with an old survey, thus luring the buyer into a sense of security which may not always be accurate.

To start, let's define what a survey is. According to dictionary.com a survey is todeterminetheexactform,boundaries,position,extent,etc.,of(atractofland,sectionofacountry,etc.)bylinearandangularmeasurementsandtheapplicationoftheprinciplesofgeometryandtrigonometry.

Now, this may sound complicated because it is. Eye-balling corners or assuming that tree lines are boundaries and that fencing setbacks are correct, is not something that a lay-person can perform with any semblance of accuracy. It takes a trained eye to determine boundaries by looking at historical metes and bounds references, old irons and landmarks and other varying documentation and topography.

Recently, surveys have "saved" several of my clients by providing additional information that was not discovered during the abstract research process that the attorney performs for title, by identifying ownership and therefore maintenance obligations of fencing and by determining appropriate setbacks for desired future improvements to the property.

In the grand scheme of things, surveys are a small price to pay in order to make sure you are getting what you bargained for. Not to mention the actual copy of the survey can be attached to or referenced in the new deed in order to insure additional confidence for yourself and future buyers.

So don't skimp...buying real estate is one of, if not the largest investment, you will ever make. Make sure you have a survey every time you buy so you DO get caught holding the "flag"...

Friday, September 09, 2011

For residents in Forsyth county affected by the Eastern Loop of the beltway, the news that Governor Perdue delivered at Tuesday's Transportation Summit was music to their ears. For almost 25 years the beltway has been proposed to circumvent the ever-congested highways and interstates that dissect Winston-Salem. The swath of the projected path has held up hundreds if not thousands of residents from selling their homes, making basic permitted improvements and has created a sense of uncertainty that only adds major anxiety in already tough economic times.

If a homeowner in the original projected path wanted to sell, they had to disclose that the area may in fact be either purchased or impacted by the road project. This impact could range from something as simple as being several hundred yards away, no closer than they currently were to I40 or from something complex and usually ambiguous such as noise cone projections, landscape berms and buffers or actually seeing their home in the mist of the proposed road bed. Deciphering these complex engineered maps that were provided online and constantly in a state of flux was left best to engineers and other transportation experts. However, even they could not give a timeline, project approval or home buyout offers. As a result, these land and home owners were forced to "sit" on property that had in many cases decreased in value as a result of the proposal. Bottom line was who would want to buy one of these properties without knowing the true future impact whether good or bad? Fast forward to today.

In recent months the DOT has been very aggressively purchasing properties in the proposed area for residents that can fill out the paperwork, get the appropriate letters in place and prove that they have a financial or physical hardship. These hardship purchases in my opinion were a good start and have gone very smoothly with processes in place that all of the sellers and buyers I have worked with, feel are very fair and seamless.

It is my sincere hope that with the Governor's announcement that the remainder of the properties can be acquired beginning in 2013 so that these folks can move on with their lives and rid themselves of the uncertainty that this has brought. According to Perdue's statement, purchases will begin 2013 with construction on the first segment beginning 2014. Folks that is just around the corner and couldn't come soon enough!

Are you being impacted by this project? If so what are your thoughts on the Governor's plan? To read a great summary article from The Triad Business Journal click the following link:

In an attempt to make appraisals more uniform and accurate new changes and additions have recently gone into place effective first of September. These changes mean that the timeframe in which a loan closes could be impacted as more detail will be required on these reports. This may in fact be one step in the right direction in a real estate world where comparable properties can be scarce at best depending on the market you're in. The new standards will require the below "ratings" to be assigned to the properties used, including the subject. In my opinion, this will "fix" the problem of appraisers using "comps" that may be similar in size and location but don't always accurately take into account the overall quality of construction, condtion and upgrades to the properties involved. How do you think these changes will effect lending? I am especially interested in hearing those comments from those of you directly involved in the industry...lenders, agents and appraisers. Please note, the information provided below is courtesy of an information email sent to me by Luann Davis of Starkey Mortgage.

Rating Description

C1 The improvements have been very recently constructed and have not previously been occupied. The entire structure and all components are new and the dwelling has no physical depreciation.

Note: Newly constructed improvements that feature recycled materials and/or components can be considered new dwelling provided that the dwelling is placed on a 100% new foundation and the recycled materials and the recycled components have been rehabilitated/re-manufactured into like-new condition. Recently constructed improvements that have not been previously occupied are not considered "new" if they have any significant physical depreciation (newly constructed dwellings that have been vacant for an extended period of time without adequate maintenance or upkeep)

C2 The improvements feature no deferred maintenance, little or no physical depreciation, and require no repairs. Virtually all building components are new or have been recently repaired, refinished, or rehabilitated. All outdated components and finishes have been updated and/or replaced with components that meet current standards. Dwellings in this category either are almost new or have been recently completely renovated and are similar in condition to new construction.

C3 The improvements are well-maintained and feature limited physical depreciation due to normal wear and tear. Some components, but not every major building component, may be updated or recently rehabilitated. The structure has been well-maintained.

C4 The improvements feature some minor deferred maintenance and physical deterioration due to normal wear and tear. The dwelling has been adequately maintained and requires only minimal repairs to building components/mechanical systems and cosmetic repairs. All major building components have been adequately maintained and are functionally adequate.

C5 The improvements feature obvious deferred maintenance and are in need of some significant repairs. Some building components need repairs, rehabilitation, or updating. The functional utility and overall livability is somewhat diminished due to condition, but the dwelling remains usable and functional as a residence.

C6 The improvements have substantial damage or deferred maintenance with deficiencies or defects that are severe enough to affect the safety, soundness, or structural integrity of the improvements. The improvements are in need of substantial repairs and rehabilitation, including many or most major components.

Rating Description

Q1 Dwellings with this quality rating are usually unique structures that are individually designed by an architect for a specified user. Such residences typically are constructed from detailed architectural plans and specifications and feature an exceptionally high level of workmanship and exceptionally high-grade materials throughout the interior and exterior of the structure. The design features exceptionally high-quality exterior refinement and ornamentation, and exceptionally high-quality interior refinements. The workmanship, materials, and finishes throughout the dwelling are of exceptionally high quality.

Q2 Dwellings with this quality rating are often custom designed for construction on an individual property owner's site. However, dwellings in this quality grade are also found in high-quality tract developments featuring residences constructed from individual plans or from highly modified or upgraded plans. The design features detailed, high-quality exterior ornamentation, high-quality interior refinements, and detail. The workmanship, materials, and finishes throughout the dwelling are generally of high or very high quality.

Q3 Dwellings with this quality rating are residences of higher quality buildings from individual or readily available designer plans in above-standard residential tract developments or on an individual property owner's site. The design includes significant exterior ornamentation and interior that are well finished. The workmanship exceeds acceptable standards and many materials and finishes throughout the dwelling have been upgraded from "stock" standards.

Q4 Dwelling with this quality rating meet or exceed the requirements of applicable building codes. Standard or modified standard building plans are utilized and the design includes adequate fenestration and some exterior ornamentation and interior refinements. Materials, workmanship, finish, and equipment are of stock or builder grade and may feature some upgrades.

Q5 Dwellings with this quality rating feature economy of construction and basic functionality as main considerations. Such dwellings feature a plain design using readily available or basic floor plans featuring minimal fenestration* and basic finishes with minimal exterior ornamentation and limited interior detail. These dwellings meet minimum building codes and are constructed with inexpensive stock materials with limited refinements and upgrades.

*Fenestration – the design and disposition of windows and other exterior openings of a building.

Q6 Dwelling with this quality rating are of basic quality and lower cost; some may not be suitable for year-round occupancy. Such dwellings are often built with simple plans or without plans often utilizing the lowest quality building materials. Such dwellings are often built or expanded by persons who are professionally unskilled or possess only minimal construction skills. Electrical, plumbing, and other mechanical systems and equipment may be minimal or nonexistent. Older dwellings may feature one or more substandard or nonconforming additions to the original structure.